Tesla deliveries expected to set a record but analysts predict a drop in EPS in 2023
Tesla (TSLA) first-quarter deliveries are expected to set another record, prompting analysts to say on Monday that if the global electric-car giant beats estimates, Tesla stock could soar. . But Wall Street forecasts that Tesla’s earnings per share in 2023 will be lower than in 2022.
With Tesla gearing up to release production and delivery data for the first quarter of 2023 in early April, Barclays analyst Dan Levy wrote Monday that he expects a “modest” delivery cadence. “. Wall Street is expected to deliver about 430,000 Teslas.
Levy writes: “There is growing concern about delivery speeds amid weaker demand signals. However, we believe that comments on production rates may imply a rise in prices for some items that may not be available. we think it will be ~430k units in the quarter”.
He added: “Assuming production only modestly outstrips deliveries (a reasonable assumption, since there was a large amount of inventory in Q4 22), it supports positive results. than consensus”.
Levy wrote that if Tesla deliveries are better than expected, it “could be a catalyst for stocks, as expectations have dipped amid signs of weakening demand.”
Barclays maintains an “Overweight” rating and 275 price target for Tesla stock. Citigroup (OLD) analyst Itay Michaeli on Monday raised his price target on Tesla stock to 192, up from 146. Michaeli maintains a “Neutral” rating on Tesla stock.
Michaeli wrote the EV company’s auto gross margin will give investors a first look at the impact of Tesla’s price drop. However, he added that the company doubts Tesla will beat delivery estimates.
Tesla shares rose 1.8% to 193.70 on Monday in premarket transaction. Shares fell 0.94% to 190.41 on Friday.
Analysts expect Tesla to deliver a total of 430,000 units in the first quarter, according to FactSet. This represents a 39% increase from 310,000 vehicles delivered in the same period in 2022. Wall Street forecasts that the number of Tesla vehicles delivered in 2023 will reach about 1.8 million units.
Analysts now also expect Tesla’s full-year earnings to fall from 2022. Wall Street is predicting earnings to fall about 3% to $3.96 per share in 2023, down from 4.07. USD/share in 2022.
Tesla sold 140,453 Chinese-made vehicles in the first two months of the year. The global EV giant exported 57% of those vehicles to Europe and elsewhere.
Meanwhile, Tesla’s lowest priced car, the Model 3, may lose eligibility with a new $7,500 US EV tax credit at the end of March. Last week, Electrek reported that Tesla had told employees it expected to lose the credit because the batteries came from China.
Tesla deliveries reach record 405,278 in Q4 2022, up 31% from a year earlier and nearly 18% from the third quarter’s 343,830. Deliveries grew 40% to 1,313,851 in 2022, but far below the company’s 50% growth target. Analysts had expected fourth-quarter Tesla deliveries to be around 420,000.
Since March 13, Tesla stock is up about 10% even as SVB Financial, Signature Bank of New York and Credit Suisse (CS) caused worries about broader financial instability. Tesla shares are down about 7.4% for the month.
Before the bank crash, Tesla sold off sharply from March 6 to 10, down 12.3%. However, Tesla stock has found support at the 50-day and 10-week moving averages.
Tesla stock is still bottoming, below the 200-day line. But that key level is now below a potential buy point of 217.75.
With Tesla delivery data expected early next week, Moody’s Investors Service Raises Tesla’s Credit Rating up one notch to Baa3, giving it investment grade status from its previous junk rating. S&P Global did the same in October. Investment grade from at least two major credit rating agencies is considered important.
Last week, Moody’s wrote the electric vehicle giant’s outlook was stable, and it expects free cash flow to hit more than $7 billion and debt restraint through 2025.
“Tesla will remain one of the leading battery vehicle manufacturers with an expanding global presence and very strong margins,” Moody’s wrote.
TSLA stock ranks third in IBD’s Automotive industry group. Tesla has 86 Overall rating over 99. This stock also has a Relative Strength Rating of 69. The EPS Rating is 99.
Please follow Kit Norton on Twitter @KitNorton for more insurance.
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